Crypto Analyst: The shutdown of Bitmain's mining activities is not a big problem

While Bitmain has made inroads in artificial intelligence and other emerging markets, Bitmain is basically a startup in mines with bitcoin and crypto-centric. So, it is not surprising that industry players were shocked by rumors that Bitmain was about to close a number of its mining-related projects. However, a cryptanalytical analyst said that the change in strategy announced by the company was not necessarily a big deal.

The operations of Crypto Mining of Bitmain would bend

Although Bitmain is hailed as the de facto king of all cryptocurrency start-ups, the firm headquartered in Beijing has reportedly had a difficult time. In recent weeks, as NewsBTC reports abundantly, (former) employees have claimed that the central of the industry had begun to lay off employees en masse. As the purge of the Copernicus team from Bitmain, which ran the Bitcoin Cash GO client, and the Israel development team was confirmed, those who know said that the company's layoffs were even deeper.

Some reports claim that around 85% of Bitmain's approximately 2,500 employees are on the cutting bench, while low estimates state that at least 50% are on very thin ice. And while estimates and details vary from source to source, an overwhelming majority of reports believe that about 500 members of the Bitmain mining team are endangered. As for the reasons why the start-up is trying to make this radical change, it has been argued that the conglomerate was supposed to prune its divisions.

Alex Krüger, a prominent crypto commentator and researcher, recently commented on the above-mentioned rumors, claiming that if true, Bitmain was not finished. The Manhattan-based investor said the news that Bitmain is downsizing his mining team has been disproportionate. He said that the company's self-managed subsidiaries and its mining operations, Bitmain, were looking to reduce their losses, bringing little economic value to the behemoth, once valued at more than $ 14 billion.

Bitmain is primarily an ASIC chip designer and a mining equipment salesman. The operation of mining pools provides 1.5% of its revenues. Exclusive mining provides 3.3%. It has 2600 employees and more than 500 people in the mines.

Source: Bitmain IPO Prospectus (https://t.co/SWZmKSFgDC) pic.twitter.com/eVZibd86p8

– Alex Krüger (@Crypto_Macro) December 30, 2018

More specifically, according to the financial data of the first half of Bitmain, which were sent via its IPO prospectus, the operating pools accounted for 1.5% of Bitmain's revenues. While Bitmain Mining was self-encrypting, a controversial practice generated only 3.3% of its cumulative revenue. And, given that the company has 535 employees, or about 20% of all employees, managing the two operations mentioned above, it makes sense for the company to think about these reductions.

Highlighting the fact that this move could be a net benefit to the cryptography industry (with the exception of layoffs), Krüger noted that if the rumors were true, used mining equipment could be routed to consumers, Bitmain mining operations changing hands. This means that the potential loss of rights of way, catalyzed by Bitmain's change of strategy, will be reversed over time, so that network security can be maintained.

Related reading: Bitcoin can not fall to $ 0 or enter a "spiral of death" – mining rules judge it if

Bitmain is not yet clear

While Krüger debunked rumors about Bitmain's mining weapons, local media and internal sources said the startup was not in the clear.

Dovey Wan, a founding partner of Primitive Capital and a well-known industry insider, recently came to his well-attended Twitter forum to spread a rumor that could upset the cryptosphere. Wan claimed that a local store, OriginalPlanet Daily, had discovered rumors that Jihan Wu and Micree Zhan would leave their co-CEO position in Bitmain.

If these rumors are true, a businessman with the surname Wang would assume the role of CEO of Bitmain. Because of the long list of employees of Bitmain, there are a number of chefs named Wang. Dovey Wan suggested that the successor in question be Haichao Wang, director of product engineering, or Shengli Wang, former board member of Huawei.

Speaking to OriginalPlanet, a familiar Bitmain user suggested that the co-CEO system was not operational, suggesting that Wu and Zhan had not been able to work in tandem. However, since Bitmain did not publicly comment on this debacle, it remains to be seen if these rumors resist. However, in recent months, it has been suggested that Wu lost the power to influence Bitmain's operational decisions and remained only a figurehead.

This internal turmoil, combined with the regulatory concerns and the nascence of this industry, has led sources to claim that Bitmain's initial public offering (IPO) was losing steam, without success. Citing "two sources close to the record," the South China Morning Post said it was too early for a cryptography firm to gain access to the Hong Kong Stock Exchange before the "appropriate regulatory framework is in place." square".

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